MBIA Engages Law Firm for Advice
MBIA Inc, the bond insurer has engaged the services of law firm of Weil Gotshal and Manges to seek advice in avoiding possible rehabilitation of its structured finance business unit under the auspices of a New York regulator. The issue was confirmed by a source familiar to the situation who spoke on condition of anonymity.
The company which is based out of Armonk, NY had previously said that its structured finance business unit may be forced into liquidation or rehabilitation.
The power to determine if an insurer based in New York needs to go into rehabilitation is the New York State Department of Financial Services. This occurs when the insurer does not have sufficient liquid funds and thus has to be placed under the control of the agency.
Previously, MBIA had worked with the said law firm in past transactions.
MBIA is the largest bond insurer in the US before the 2007 financial crash. It has faced litgation suits over its restructuring in 2009, where the two businesses namely municipal guarantees unit and the structure finance unit was separated with the latter absorbing the greatest loss because of the failed mortgages,